In his co-authored 2008 book, Managing Flow: A Process Theory of the Knowledge-Based Firm, Ikujiro Nonaka examine how those Japanese companies with consistently superior results leverage knowledge creation to develop innovative products and services. The book extends ideas you may have come across in his 1991 HBR article (linked to the current piece), “The Knowledge-Creating Company.” In Managing Flow, Nonaka explains and develops ideas concerning what is often called tacit knowledge—ideas that still diverge from standard corporate practices. Nonaka’s view is of knowledge management not as a form of information technology, but as an enabler of in-depth learning. This article that look at the scholar’s work notes that “he’s the only Asian on the Wall Street Journal’s list [2008] of the 20 most influential business thinkers.”
Most companies, according to the author, place responsibility for knowledge management in their IT departments, expecting them to codify best practices and organize information for easy capture, storage, indexing, and retrieval. In Nonaka’s perspective, this is a minor aspect of the successful use of knowledge to create value. His emphasis on the concept of a knowledge-creating company fits well with the growing recognition by companies that human capital is their primary resource. This recognition spurs companies to cultivate tacit knowledge and use it by helping people communicate it and make it explicit. Knowledge processes are fostered by individuals who embody Aristotle’s notion of phronesis (or practical wisdom), exemplifying the use of tacit and explicit knowledge as they act in creative and timely ways. Nonaka’s emphasis is on the techne form of subjective, tacit knowledge, in contrast to the more familiar theoretical knowledge or episteme.
Along with conveying some of the flavor of Nonaka’s life, this article summarizes a four-stage spiraling developmental process (from Managing Flow) for creating knowledge. These four mutually reinforcing stages are: Socialization, which involves mobilizing people for face-to-face communication and immersing them in shared experiences that help them develop empathy for customers; externalization—the translation of tacit experience into words and images that can be shared with a larger group; combination—the extension of tacit knowledge into explicit forms that can then be disseminated throughout the organization; and internalization—the reabsorption of explicit knowledge back into daily practice.
Nonaka makes other recommendations for companies wanting to improve their ability to create knowledge. These include cultivating ba by reserving time and space for people to come to a deeper understanding of one another through conversation, and mapping out the particular sources of knowledge that enable them to create value in the marketplace.